Dow Falls Sharply, Stocks Close Lower on Turkey Crisis Jitters

Here Are 3 Hot Things to Know About Stocks Right Now

President Trump said Friday he would double the level of tariffs applied to Turkish steel and aluminum imports, a move that extended the Turkish lira's decline.

The Nasdaq fell on Friday after having closed higher Thursday for an eighth straight session.

Consumer prices in the U.S. rose 0.2% in July, matching economists' estimates, while core CPI -- which strips out gas and food prices -- also rose 0.2%. The core rate of inflation over the past 12 months jumped to 2.4%, the highest rate since September 2008.

Wall Street Overview

Stocks on Wall Street closed sharply lower on Friday, Aug. 10, amid concerns over the ongoing slide of the Turkish lira and fears the country's economic and political crisis could spread to Europe and elsewhere.

Turkey's lira hit a fresh all-time low of 6.395 against the dollar, extending its year-to-date plunge to around 30%, after a trade delegation of senior government officials left Washington on Thursday, Aug. 9, with no verifiable progress on the White House's decision to review Turkey's "duty free" access to the U.S. market. The turmoil is part of an ongoing spat with Turkey over the arrest of evangelical pastor Andrew Brunson, whom officials accuse of leading a failed 2016 coup.

Tensions mounted on a defiant speech from Turkish President Recep Tayyip Erdogan, who urged Turks to take the gold from "under their pillows" and convert it into lira, vowing that "we are only responsible to our own people and our own righteousness."

President Trump responded via Twitter, announcing he would double the level of tariffs applied to Turkish steel and aluminum imports, a move that extended the lira's decline and pushed U.S. stocks lower.

The Dow Jones Industrial Average fell 196 points, or 0.77%, to 25,313, the S&P 500 fell 0.74% and the Nasdaq was down 0.67%. The tech-heavy Nasdaq closed higher on Thursday, Aug. 9, for an eighth straight session, its longest winning streak since October.

The slump has driven investors into safe-haven trades, lifting the U.S. dollar index to 96.45 against a basket of six global currencies and driving benchmark 10-year U.S. Treasury yields to 2.85%.

The U.S. Consumer Price Index for July rose 0.2%, matching economists' estimates, while core CPI - which strips out gas and food prices - also rose 0.2%. CPI over the past 12 months rose 2.9%, unchanged from June, but the core rate of inflation over the past year jumped to 2.4%, the highest rate since September 2008.

Mike Loewengart, vice president of investment strategy at E*Trade Financial Corp., said the CPI numbers send a "signal that inflation is here to contend with.

"Investors have reason to take caution, with stagnant wage growth this news could start affecting their wallet. What's also interesting is that trade tensions didn't constrain the results, with strong fundamentals and solid job growth trumping the downside. This data only strengthens support for the (Federal Reserve's) path toward continued tightening," Loewengart said.

Shares of Dropbox Inc. (DBX) fell 10% on Friday after the cloud-storage company posted second-quarter earnings and revenue that beat analysts' expectations but announced that Chief Operating Officer Dennis Woodside would be departing.

China's economy slowed to its weakest growth rate since 1990, official data confirmed Monday, as a damaging trade war with the United States, and efforts to curb domestic pollution and reckless lending, took a major bite out of the world's second largest economy.